If government purchases increase and as a result push current output above potential output, monetary policymakers are likely to:
A. purchase Treasury securities.
B. raise the real interest rate.
C. lower the real interest rate.
D. keep the real interest rate constant and focus on only changing the nominal interest rate.
Answer: B
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In 2003, government spending as a percentage of GDP was approximately
a. 75 percent b. 50 percent c. 33 percent d. 20 percent e. 10 percent
Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased. The result suggests thatÂ
A. these markets were contestable. B. there was evidence of market power. C. oligopoly firms bought out their competitors. D. the market had no barriers to entry.
The music streaming industry, where a firm's profitability depends on its interactions with other firms, is an example of
A) perfect competition. B) monopolistic competition. C) monopoly. D) oligopoly.
Under which chair did the Fed implement the policy of inflation targeting?
A) Volcker B) Bernanke C) Greenspan D) Geithner